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NewsFlash- [CBRE HK Q3 MV] Office: Improving Momentum in Sub-markets

CBRE today launches the Hong Kong Office Q3 MarketView. Below are the key findings from the report. For more information or to arrange an interview contact [email protected] / 2820 2960.

Rents are likely to remain flat across Hong Kong Island. While Grade A1 buildings could enjoy further rental growth on the back of high occupancy levels and demand from PRC firms, rents for non-A1 buildings could face competition in the face of the large upcoming vacancies that are likely to pull down rents.” Mr. Rhodri James, Executive Director, Office Services, CBRE Hong Kong,

CBRE Outlook for Q4 2014

Vacancy rate in Central is expected to rise once again as all of the Bank of America Merrill Lynch space in Citibank Plaza becomes available. Similarly in Midtown, Times Square – Tower 2 will have two whole floors of NFA 15,000 sq. ft. per floor available in Q4 and potentially more to follow

Rents are likely to remain flat across Hong Kong Island

Kowloon showed signs of improving leasing momentum while net absorptions for Tsim Sha Tsui and Kowloon East both rebounded from negative to positive again in Q3. The lowered vacancy level and improved sentiment could help to provide support for rents in Kowloon to remain stable for the remainder of 2014

CBRE Highlights for Q3 2​014

HK Island fringe core had the most notable drop of vacancy (down by 80 ppts q-o-q) where improved occupancy levels were mostly seen in non-A1 buildings

Mainland Chinese securities and wealth management firms continued to be the main driver of demand in Central and Hong Kong Island fringe core areas. On the other hand, semi-retail and some minority sector tenants are also expanding

Multinational corporations in the core markets remained cost conscious and most prefer to renew over relocating as cost is increasing. The limited availability of large and contiguous space in decentralized markets also posted further challenges for occupiers

Improving occupancy in Hong Kong Island fringe core has pushed rents up by 1.8% q-o-q and is the only district on HK Island to have recorded a positive rental growth y-t-d

Kowloon leasing market became active again to see quarterly net absorption returning positive with TST and Kowloon East registered strongest rebound

Larger deals were seen in Kln East where advertising, retail and manufacturing sector tenants took space during Q3